The cabinet is no longer ignoring it: the Tax and Customs Administration has been guilty of ‘institutional racism’. Having a non-Dutch nationality, sometimes even having a ‘non-Dutch appearance’ in the eyes of an employee, was enough to be disadvantaged during tax audits, receiving benefits or starting a business.
Ever since the start of the Allowances affair, in which tens of thousands of parents were duped by the tax authorities’ fraud approach, there has been a suspicion that the service is partly led by racist prejudices. It is the first time that the government itself has concluded that racism played a role in the abuses. “Extremely painful”, says State Secretary Marnix van Rij (Fiscality and Tax Authorities, CDA) in a letter to the House of Representatives.
The government bases its conclusion not so much on the Allowances Affair as on the so-called Fraud Alert Facility or FSV, better known as the ‘black list’. Various parts of the Tax and Customs Administration kept track of possible fraudsters on that FSV list, but the names of innocent citizens also ended up on this list, partly because of their non-Dutch nationality. They could then be excluded from debt restructuring or otherwise get into trouble.
The blacklist was intended for internal use. Only then RTL News and Fidelity reported about it in early 2020, the system was turned off. More than 200,000 Dutch people had been put on the list. It was not only about benefit recipients, you could also end up on the list via an income tax return or as an entrepreneur.
No less painful
Van Rij deliberately speaks of ‘institutional racism’. It is not the intentions of the Tax and Customs Administration employee that are central here, but the consequences for the citizen. It is “less about intention or intention, more about behavior that arises from unconscious prejudices and ignorance,” Van Rij writes to the Chamber, “which is of course no less painful for the affected people.”
Pressure to recognize institutional racism has increased in recent months. But at the end of March, State Secretary Van Rij refused to speak of racism. Two new PwC investigations then described that the Tax and Customs Administration had placed people with a certain nationality and an ‘offender profile’ on a fraud list. For example, “gifts to mosque” was a reason to put someone on the fraud list.
The State Secretary then called the practices ‘discriminatory’. There was no question of racism, he said: “It is about systematically and consciously humiliating a population group and that does not happen here.” He did call the course “morally reprehensible.” Rabin Baldewsingh, the National Coordinator against Discrimination and Racism, told Trouw in April that Van Rij should recognize institutional racism. “You make people feel like they don’t matter. You have to acknowledge and recognize their pain.”
That has finally happened with the letter to parliament. But what does this mean?
Professor of administrative law Bert Marseille considers it unlikely that this will have legal consequences. “On December 10, the decision of the Supreme Court showed that, if you have lawfully received an excessive assessment, it does not matter whether you were unlawfully included on the list. So it will still case-by-case must be determined. Furthermore, there is little chance that the Secretary of State was not legally informed about what this would mean before acknowledging it.”
Acknowledging Error and Guilt
This does not mean that the acknowledgment is useless. Marseille: “It is symbolic, yes, but symbols mean something. Acknowledging the error is showing the tax authorities’ human face. You can solve everything legally, but if fault and guilt are not acknowledged, trust will never be restored.” But, he continues, then you also have to take the second step: how are you going to learn from it?
The letter to parliament announces a ‘learning approach’, mainly aimed at ‘raising awareness’. Discrimination, racism and prejudice must be given a place in the culture and leadership trajectory; ethical dilemmas and cases of institutional racism are discussed ‘in groups’, ‘at all levels’; and employees were asked to look critically at selection processes.
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The tax authorities will have to change – “a kind of cleaning process”. The Secretary of State also says that supervision should not “cramp up”. Because: “That is also not in the interest of the citizen.” According to Marseille, risk selection and risk profiles – the process of determining who needs extra supervision – are an integral part of the Tax and Customs Administration and will therefore not disappear. “Not every distinction is discriminatory when there is a justification for it.”
Van Rij says that, for example, a dual nationality or a gift to a mosque will again be taken into account in the selection process in the future. But “never as the sole criterion”. For example: “We can use all donations to church organizations as a criterion, but only donations to mosques – that should not have happened.”
In concrete terms, a framework will be published this quarter against which risk profiles and selection procedures can be tested. This framework will establish a number of ‘guarantees’ to ensure legality. The government will also try to make the selection procedure more transparent.
In the short term, it will be examined who is really disadvantaged on the ‘black list’. According to the state secretary, this concerns five to fifteen thousand people. They will be compensated. “There will be a separate letter to parliament about this in June.”
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